1. 70 PM NETWORK MAY 2016 WWW.PMI.ORG
Ed LeBard, PMP, is a project manager and
architect at Gensler, Washington, D.C., USA.
Estimate,
Then Repeat
Outdated prices can doom construction projects.
Avoid them with the right estimating process.
By Ed LeBard, PMP
liminary bids need to be obtained and when the
design documents have to be submitted. Com-
munication and consensus are key. For example,
if you’re leading a design team of architects and
engineers on a ground-up 30,000-square-foot
(2,800-square-meter) project, ensure that the client
and preconstruction consultant agree to the design
submission milestones prior to the start of the
project. Cost-estimating reviews always should be
factored into the project scope and project sched-
ule. A two-week time frame is standard for a cost-
estimating effort. For extremely large projects, such
as a 1 million-square-foot (93,000-square-meter)
stadium, more than two weeks may be needed.
RIGHT PRICE AT THE RIGHT TIME
Regardless of the project delivery approach
(design/build or design/bid/build), the cost-esti-
mating process should recur frequently. Here is
where you should schedule cost estimates during
each phase:
Conceptual design phase: at the end of the phase
or for each conceptual design scheme/option
Schematic design phase: at the end of the phase
Design development phase: at the 50 percent
milestone and the end of the phase
Construction document phase: at the 50 percent
and 95 percent milestones
This approach will keep the project team, client
and preconstruction consultant on the same page.
By drawing on up-to-date prices, you will reduce
the risk of the lowest bid proposal from the general
contractor far surpassing what you had expected to
pay. Should the lowest bid still surpass the earlier
cost estimates, the client and project team have
four options: cancel the bids and re-bid later, over-
haul the project requirements, reduce the building
area or cancel the project altogether.
By tracking and documenting cost-estimating
milestones, and sharing results with critical stake-
holders, your project team increases the prospect
of a successful project and a happy client. PM
I
magine you discover your construction
project has been using outdated pric-
ing estimates.
When the current figures come in,
you realize that you’ve derailed your
project and your relationship with the client and
possibly endangered your job security. Now the
client, architect and preconstruction consultant
have to sit together and review how and why the
project team got to this point. Tough decisions—
such as overhauling the project’s requirements,
cutting the building area or reducing design qual-
ity—have to be made. If your project already has
submitted a building permit, you likely will have
to submit a new one, adding significant time and
expense.
How can we prevent this scenario from
happening?
The best way to responsibly manage cost-
estimating efforts during the design phase of
a project is to document and track when pre-
Getting It Done PROJECT MANAGEMENT IN ACTION
Cost-
estimating
reviews
should
always be
factored into
the project
scope and
project
schedule.